energy storage

PCI/PMI list preliminary ratings out, GREGY a borderline case

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The European Commission’s Directorate-General for Energy, preparing a shortlist of electricity projects for a sixth PMI/PCI list, including Projects of Mutual Interest and Projects of Common Interest, has just staged a teleconference with representatives of projects vying for a place on the list.

As for the PMI list, the Brussels officials, in addition to preliminary ratings for candidate projects, also presented their criteria and formula applied for appraisals.

The presentation of these details was necessary as, under the revised TEN-E Regulation, new PMI selection criteria are being used for the first time for projects also involving non-EU members.

According to energypress sources, the GAP Interconnector, an Egyptian-Cretan power grid interconnection project plan been promoted by the Eunice group, was not appraised, as had been expected, because it has not secured Letters of Support from the Greek state.

GREGY, another Greek-Egyptian grid interconnection plan, which is being promoted by the Copelouzos group, was given a preliminary rating of 9.3, just below the 10-level score required for inclusion on the PMI list.

GREGY project officials have until June 30, when the PMI shortlist will be announced, to enhance their project’s dossier with additional details that could boost its rating and secure a place on the PMI shortlist. Copelouzos group officials are confident this can be achieved.

The Euroasia Interconnector, planned to link the Israeli, Cypriot and Greek power grids, has amassed the points needed to secure its inclusion on the PMI shortlist.

A total of five European projects, two of these with Greek interests, have achieved preliminary scores offering places on the PCI shortlist.

One of the two Greek projects, Terna Energy’s pumped-storage station project plan for Amfilohia, northwestern Greece, was included on the EU’s PCI list in 2013, while all indications suggest it will retain its place on the list’s sixth edition.

The Eunice group’s Ptolemaida BESS, a 250-MW energy storage facility planned for Ptolemaida, northern Greece, has scored highly for a place on the revised PCI shortlist.

Licensing, earnings clarity ‘issues’ for storage framework

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Investors behind standalone battery installations at RES units have named licensing maturity issues, lack of clarity on how market earnings for such energy storage systems could be calculated, as well as the impact of grid injection restrictions as main concerns that need to be addressed by authorities.

Market players expressed their opinions in response to an energypress request for an initial assessment of a new legal framework regulating energy storage.

Participants commended the establishment of a legal framework facilitating the entry of energy storage into the country’s grid, noting, however, that this set of rules arrived with considerable delay, at a time when such an option had almost become a necessity as a result of RES grid injection cuts imposed on producers to protect the grid from overload issues during periods of low electricity demand.

Market players generally offered favorable assessments of the country’s new framework for energy storage, noting it supports rapid deployment of energy storage systems, helps reduce market-related risks, and, by extension, helps reduce financing costs.

Auction for standalone battery aid announced by June 15

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RAAEY, the Regulatory Authority for Waste, Energy and Water, is moving fast in its preparations for an inaugural auction to provide investment and operational support for standalone batteries as part of a wider plan offering a total capacity of 400 MW for this technology.

According to sources, the authority aims to announce a first auction by June 15, with bids to be submitted by investors three weeks later, in early July, as has been previously reported by energypress. The caretaker government’s energy minister Pantelis Kapros discussed the matter yesterday with RAAEY authorities.

Projects whose bids are deemed eligible will qualify for the investment and operational support, ranked in ascending order based on annual allowance amounts claimed, until all 400 MW being auctioned has been exhausted.

A shortlist of successful projects is expected to be finalized in early August, before contracts are signed.

The overall procedure is now moving ahead on a far tighter schedule than originally planned as a result of Recovery and Resilience Facility (RRF) time constraints. This facility will offer successful bidders a sum of 200 million euros in subsidy support for their standalone battery installations.

Local energy storage prospects favorable, risks identified

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A latest study by Berlin-based research firm E3 Analytics, expected to be published later this week, identifies considerable growth prospects for energy storage batteries in Greece, while also making note of several risks.

The authors of the study, which has been obtained by energypress, stress, among other aspects, that despite certain risks, the outlook for the energy storage market in Greece remains “promising”.

Special reference is made to Greece’s institutional framework, designed to resolve issues and protect against unfavorable outcomes such as a concentration of control of the emerging energy-storage market by few investors.

Such issues have been experienced, and taken note of, in mature markets such as those of the UK and Italy, while preventive measures adopted by Greece for the country’s corresponding yet nascent market are viewed favorably.

Such positivity was also expressed in local consultation, during which market players commended the Greek plan’s measures designed to ensure a geographical spread of energy storage batteries.

One of the risks identified by the authors of the study concerns the correlation between battery revenue and electricity markets and the development of electricity prices in the coming years.

Other risks include lower market prices, cannibalization by other storage projects, and a rapid rise of demand-response options that could potentially undermine energy storage prospects, the study notes.

Battery storage investment interest has skyrocketed in Greece since 2021. The number of permits have soared from 4.7 GW in June, 2021 to 23.2 GW at present.

 

Standalone batteries auction sooner; RRF time constraints

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An inaugural auction offering capacities for standalone batteries will take place by early July, at the very latest, leaving investors with about half the time they had anticipated to prepare.

The first auction, according to a ministerial decision published in the government gazette, is scheduled to take place between three to four weeks after RAAEY, the Regulatory Authority for Waste, Energy and Water, officially announces the session, far sooner than a period of six to eight weeks originally stated in a draft of the plan. RAAEY’s announcement is expected early in June.

This halved preparatory period for participants resulted from Recovery and Resilience Facility (RRF) time constraints. This facility will offer successful bidders a sum of 200 million euros in subsidy support for their standalone battery installations.

According to the RRF deadlines, the first wave of RES projects with standalone batteries ought to have secured their tariffs by the end of June, which puts the overall procedure slightly behind schedule with no time to waste.

No changes to RES, energy storage grid injection limit plan

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The energy ministry has completed work on a ministerial decision designed to restrict injections into the grid by new RES and energy storage units and plans to sign it off within the next few days as the matter is one of the energy sector’s pending issues the ministry wants to have settled ahead of the May 21 legislative election.

According to sources, formulas proposed by power grid operator IPTO and distribution network operator DEDDIE/HEDNO have been maintained for the ministerial decision.

The ministry’s decision to impose grid injection restrictions was taken in order to make optimal use of available electrical capacity in the transmission and distribution system and ultimately maximize the number of green-energy power plants.

According to the legislative revision, the energy injection restrictions will not be able to exceed 5 percent of the respective annual capacities of units subject to the limit.

The measure will apply to all RES plants under development and possessing finalized connection offers, as well as to green-energy projects for which connection requests have been submitted to either DEDDIE/HEDNO or IPTO. Batteries will also be subject to the injection restriction, regardless of whether they have been incorporated into RES systems or not.

Europe favorably placed ahead of next winter’s gas storage refill

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Favorable conditions last winter have placed Europe in an advantageous position of being able to fill, to full capacity, its natural gas storage facilities even if Russian supply is completely cut off.

Europe needs to store away approximately 35 billion cubic meters of natural gas between now and the end of October, well below the average figure of roughly 55 bcm over the past decade, in order to fill its energy storage facilities at 90 percent of capacity, the European goal set for next winter.

A year ago, Europe needed to purchase approximately 70 bcm of natural gas to fill its storage facilities. This was one of the factors that pushed prices up to all-time highs.

Fortune went Europe’s way last winter as temperatures remained mostly mild, significantly subduing energy usage, while China’s zero-Covid policy enabled the continent to import substantial LNG quantities which, otherwise, would not have been available.

As a result of these factors, Europe’s gas storage facilities were left 55 percent full by the end of last winter, well above the previous decade’s average of 33 percent.

Despite the favorable news for Europe, the market remains susceptible to dangers as a result of increased natural gas usage in the industrial sector and revitalized demand in Asia, factors that have led analysts to forecast a wholesale gas price rebound that could exceed 100 euros per MWh.

Also, the milder weather conditions could have negative impact in the long run. Low rainfall and snowfall in many parts of Europe could lead to a hot and dry summer, increasing energy demand for cooling purposes, and prices. This could make Europe’s energy-storage refilling effort slightly more challenging.

Roof-mounted solar panel subsidies offer major benefits

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A new subsidy support program for roof-mounted solar panels, announced by the energy ministry yesterday, promises considerable, bigger-than-expected rewards for households and farmers.

A small 3-KW solar panel system costing 11,500 euros, for example, can offer benefits worth a total of 22,000 euros over a 25-year period, the duration of supply agreements, bigger 5-KW systems costing 13,500 euros promise to offer benefits of nearly 40,000 euros, while 7-KW systems costing 17,000 euros can offer rewards totaling 65,000 euros over a 25-year period, energy consultant Stelios Psomas has determined in an analysis for energypress.

The energy ministry’s support package for roof-mounted solar panel installations offers high-level subsidies for households and farmers, up to 100 percent cost coverage for batteries, as well as simplified application procedures.

The support package’s overall cost benefits for four separate categories, based on annual electricity usage levels, are far bigger than initial estimates that had been based on a preliminary announcement, concerning the program, a few months back.

Roof-mounted solar panel subsidy coverage for the four categories ranges from 70 percent for lowest-level annual electricity usage levels of up to 4,500 kWh and 40 percent for annual electricity usage levels of 15,000 kWh and over.

SPEF: RES tariffs need to be adjusted to inflation annually

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RES unit tariffs need to be adjusted annually in accordance with inflation rate changes, Stelios Loumakis, president of SPEF, the Hellenic Association of Photovoltaic Energy Producers, has told the European Commission’s Directorate-General for Energy Ditte Juul-Joergensen, who held a meeting with key domestic market players as part of her visit to Greece to take part in the ongoing Delphi Economic Forum.

A system annually adjusting guaranteed RES tariffs needs to be applied to projects from 2016 onwards, as a percentage of annual inflation, as was the case up until 2014, the SPEF chief pointed out.

This need has arisen as a result of drastically increased interest rates on loans and project development costs, as well as the impact of higher inflation, Loumakis noted.

The SPEF official also noted that power grid operator IPTO must pause issuing new RES connection offers until grid energy storage installations have commenced. RES connection offers need to be issued proportionately with the development of energy storage unit installations, Loumakis added.

To date, IPTO has issued RES connection terms totaling 25 GW, including projects already in operation, a level that already meets the country’s goal for 2030.

Loumakis also called for the removal of a cap on the remuneration of RES producers, noting its level of 85 euros per MWh, under current market conditions, is depriving the Energy Transition Fund of cash inflow.

Investors approve standalone battery support plan

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Investors are responding favorably to an energy ministry draft planned to offer investment and operational support, through three auctions, for standalone batteries representing a total capacity of 1,000 MW, following preliminary examinations of the plan, now undergoing consultation until May 2.

Consultation participants have noted the ministry’s investment support plan is headed in the right direction, commending its series of safeguards ensuring that support will be given to storage units which, through their operation, will provide maximum benefits to the system.

The plan’s safeguards are designed to ensure a geographical spread of standalone battery installations around the country, which, besides offering maximum benefits to the grid, will also help diffuse project ownership among numerous investors.

The safeguards also include provisions designed to achieve maximum possible competition in auctions, but also to monitor the implementation of projects selected for support.

The energy ministry plans to stage a first auction by the end of June, offering investment and operational support for standalone batteries representing a capacity of 400 MW, followed by a second session in the third quarter of the year to offer support for units totaling 300 MW.

These two sessions will be open to investors behind prospective projects throughout Greece, while the third auction, planned to take place in the fourth quarter and offer support for standalone batteries with a total capacity of 300 MW, will be open to investors installing such units in the country’s post-lignite areas, namely Kozani and Florina in the north and Megalopoli in the Peloponnese.

 

Draft for standalone battery support in consultation

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A draft outlining a ministerial decision to offer investment and operational support for standalone batteries representing a total capacity of 1,000 MW through three auctions has been forwarded by the energy ministry for consultation, running until May 2.

The draft includes all auction details except for the starting price that will be set for the inaugural auction, which the energy ministry aims to stage by the end of June. This first session is planned to offer investment and operational support for standalone batteries representing a capacity of 400 MW, while a second session in the third quarter of the year will offer support for units totaling 300 MW.

The first and second auctions will be open to investors behind prospective projects throughout Greece, while the third auction, planned to take place in the fourth quarter and offer support for standalone batteries with a total capacity of 300 MW, will be open to investors installing such units in the country’s post-lignite areas, namely Kozani and Florina in the north and Megalopoli in the Peloponnese.

Geographical caps will be imposed on the first and second auctions to promote a spread of installations around the country.

Investors will need to have secured energy storage permits to be eligible for taking part in the upcoming auctions, according to the energy ministry’s draft. Also, project capacities cannot exceed 100 MW or be less than 1 MW.

Standalone battery projects that qualify for investment and operational support through the three auctions will need to be launched by December 31, 2025.

 

 

 

Hefty REPowerEU proportion for standalone batteries

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The energy ministry is earmarking a significant share of grants Greece stands to receive through REPowerEU to further increase the first wave of standalone batteries that will be installed and also to support the country’s early-bird ventures in the renewable gas sector.

From the outset, the energy ministry’s intention has been to use part of these REPowerEU funds, totaling 769 million euros, to further promote energy storage. However, the final amount to be allocated has been somewhat reduced to 90 million euros, compared to 100 million originally envisaged, an adjustment made to ensure sufficient funds remain for other actions.

The REPowerEU financial injection promises to boost by about one-third a sum of approximately 200 million euros secured through the Recovery and Resilience Facility (RRF) as investment support for standalone batteries.

This means that, despite the rising cost of batteries in recent months, the increased sum will be able to support the development of a portfolio of projects with a total capacity of over 1 GW.

The European Commission still needs to approve, following consultation, the REPowerEU list of actions planned by Greece. At this stage, it is believed Brussels will not raise objections as the actions planned by Greece are totally aligned with priorities set at a European level for projects that promise to accelerate the energy transition ending the continent’s reliance on Russian fossil fuels.

 

Storage unit permit processing inconsistencies causing issues

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Investors seeking to make progress with environmental permit procedures for standalone batteries ahead of an inaugural auction that will offer investment and functional support to energy storage units find themselves facing differing processing speeds at various licensing authorities around the country.

These delays have been largely attributed to the fact that licensing authorities have been tasked with granting licenses for energy storage units for the first time, a newness causing some hesitancy.

The problem is even more acute for energy storage projects with capacities of up to 100 MW as they also require approval from regional authorities, despite an energy ministry circular specifying that an environmental report is sufficient. In some cases, additional information and supporting documents are being requested by certain regional authorities.

Although the issue has generally been straightened out in recent months, differing processing speeds for environmental permit applications remain.

Power grid operator IPTO has received applications to connect standalone batteries representing a total capacity of 5,340 MW, a pool regarded as sufficient for the inaugural auction offering investment support to go ahead.

The differing licensing speeds for energy storage units are resulting in a greater accumulation of such projects in areas where authorities are less demanding.

If energy storage projects end up being excluded from auctions as a result of not possessing environmental permits, then the objective of an even geographical spread of such projects may not be achieved.

A sum of 200 million euros stemming from the Recovery and Resilience Facility (RRF) will be offered as investment support for energy storage units under the condition that an inaugural auction is staged by late June.

This essentially means that RAAEY, the Regulatory Authority for Waste, Energy and Water, will need to officially announce a first auction by mid-May, an initiative requiring a related ministerial decision.

 

IPTO moves fast to issue 4,250 MW in RES connection offers

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Power grid operator IPTO has issued connection offers totaling a capacity of 4,250 MW for RES projects seeking grid space since the arrival of a recent ministerial decision signed last August and revised in late January to shape the procedure’s details, including its fast-track priority system.

The operator has also received a substantial number of applications for a first wave of standalone batteries representing a total capacity of 5,340 MW. These applications have already received environmental permit, meaning the turnout for an upcoming investment support program expected to be staged by the end of June will be considerable.

A ministerial decision will need to be issued this month so that a first auction may be staged within Recovery and Resilience Facility (RRF) fund deadlines.

Late-June auction for energy storage investment support

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The energy ministry, pushing to meet EU Recovery and Resilience Facility (RRF) deadlines to maximize gains, including 200 million euros available as investment support for new standalone battery installations offering a total capacity of 900 MW, plans to stage an inaugural auction for this energy-storage technology in late June.

As part of the effort, the ministry is working to deliver a ministerial decision specifying all details concerning the auction by mid-April, which would pave the way for RAE, the Regulatory Authority for Energy, to announce a related auction by the end of the month or early in May, giving prospective bidders time to prepare.

At this stage, it appears the investment support for 900 MW in standalone battery installations will be offered over two auctions, each offering support for roughly 450 MW. Officials aim to schedule the second auction for a few months after the first and definitely within 2023.

The forthcoming ministerial decision’s auction specifications will include technical details. RES projects to be eligible for the auction are expected to face 100-MW capacity limits, securing the participation of a sufficient number of projects located at various parts of the grid.

Also, RES projects incorporating energy storage systems offering durations of two and four hours will be offered priority, sources informed.

 

Athens promoting domestic RES equipment production

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The government is promoting support programs for Greek production of RES-sector equipment, from batteries to energy storage systems, production and assembly of solar panels, as well as equipment concerning the hydrogen and electromobility sectors, energy minister Kostas Skrekas revealed to energypress in a wide-ranging interview held as part of the recent Power & Gas Forum in Athens.

In the interview, given to energypress editor-in-chief Thodoris Panagoulis and Capital’s managing editor Haris Floudopoulos, the minister, amongst other things, referred to the finalization of the National Energy and Climate Plan, which, he stressed, will be set within a more realistic framework, based on respective adjustments at European level.

Skrekas also referred extensively to developments in the retail and wholesale electricity markets, noting the supply code must be changed. He also pointed out the government’s imminent support to energy-intensive industry through a program promoting self-production and energy storage.

The minister highlighted the government’s emphasis on green energy, noting Greece, for the first time, has a RES-sector advantage over European countries of the north and must utilize the country’s ample sunshine to the benefit of household and professional energy consumers.

“The strategy we have developed over the past three years, and for going forward, is about the rapid penetration of renewables in our energy mix. Of course, in order to achieve this, reforms were needed and many steps still need to be taken,” the minister noted, adding further development of RES units and storage, as well as networks, must be addressed to reach a point where all energy consumed is derived from renewables.

Greece is playing a leading renewables role on many fronts, the minister said, making note of the country’s greater licensing speed, highlighted by doubled installed RES capacity within three to four years, from 5-5.5 GW in 2018 to over 10 GW in 2022, which, he added, has resulted in doubled electricity generation from renewable sources.

‘Incentives for battery additions to PVs would free up grid space’

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Power grid operator IPTO’s Deputy Chairman, Ioannis Margaris, participating in a panel discussion at yesterday’s second and final day of the Power & Gas Forum in Athens, proposed incentives for behind-the-meter energy storage unit additions to still-unelectrified solar panel installations as a means of making available extra grid capacity for new RES projects.

Efficient use of the grid’s limited capacity is crucial. Authorities have already warned that unless drastic action is taken, the country’s grid capacity is headed towards exhaustion in the coming years.

At present, occupied grid capacity totals 25 GW, 11 GW concerning RES projects already operating and 14 GW concerning active final connection offers, the IPTO deputy noted.

Margaris stressed that grid access in many parts of the country will soon become unavailable given the large number of RES project connection applications submitted by investors to IPTO.

Stricter terms limiting the duration of connection offers for stagnant projects, a measure that was recently ratified in Parliament as part of a multi-bill submitted by the energy ministry, will help free up valuable grid capacity, the IPTO deputy stressed.

Also taking part in the forum’s panel discussion, Dr. Stavros Papathanasiou, Professor at the National Technical University of Athens (NTUA), agreed that a solution concerning the addition of energy storage units to RES projects will, sooner or later, need to be adopted.

Adding behind-the-meter batteries to solar panel systems, either under development or already operating, is the only option to avoid big project cuts as the objective is to accommodate as many RES units as possible into the grid’s limited capacity, the professor stressed.

Battery additions will, of course, increase the cost of solar energy projects, but this increase should not add more than 15 to 20 euros per MWh to the cost of electricity produced by each project, assuming batteries with a duration of between 0.5 and one hour are installed, Papathanasiou informed.

 

Subsidy package enhanced for roof-mounted PVs with storage

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A subsidy package supporting roof-mounted solar panel installations with energy storage units, whose terms and conditions were announced yesterday, has been enhanced on a number of fronts.

The capacity limit for solar panel installations eligible for this support program has been raised to 10.8 kW from 7 kW. Also, besides households, the package will also be offered to farmers. This latter category’s inclusion into the program had been in doubt over beliefs that funding availability was insufficient. However, the subsidy package’s budget has now been boosted to 200 million euros from a previously reported total of 150 million euros.

The support program’s increased budget was bound to happen as 35 million euros would have been required for low-income families, while a 10 percent subsidy bonus was also added to the offering for persons with disabilities, single-parent families and multi-member families.

Authorities were prompted to deliver a more generous support package as a result of strong interest expressed by prospective applicants.

The capacity limit boost, to 10.8 kW per roof-mounted solar panel installation, also required a capacity lift for incorporated energy storage units, from 7 kW to 10 kW.

Households stand to receive subsidies covering as much as 75 percent of the cost of roof-mounted solar panel installations with energy storage units, while farmers will be subsidized for up to 60 percent of their cost.

This means households stand to qualify for subsidies worth as much as 16,000 euros and the package’s support for farmers may reach 10,000 euros.

 

 

 

Ministerial decision imminent for RES-related standalone battery support

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The energy ministry is believed to be just weeks away from finalizing a ministerial decision needed to establish a competitive procedure concerning investment and operational support for RES-related standalone batteries.

The energy ministry is expected to announce its required ministerial decision in April, ahead of a first auction planned to take place no later than June.

The ministerial decision will detail the number of auctions to be held and their scheduling, as well as the type of auction to be adopted, among other key matters.

They include the starting price of auctions; prerequisites, including minimum capacity requirements, that will need to be met by RES projects in order to seek investment and operational support for RES-related standalone batteries; as well as the stage of licensing maturity that will be required of auction participants.

As has already become known, auction participants will submit, as their bids, expected annual revenues of projects (in terms of euros per MW of storage capacity). Investors seeking lowest tariffs for their projects will prevail.

An upper capacity limit of 100 MW per project is expected to be set. Also, companies and any of their subsidiaries will be limited to project support not higher than 25 percent of the overall capacity being auctioned.

Incentives for RES projects with storage units considered

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The energy ministry is considering subsidy support and licensing simplification initiatives as incentives that could encourage RES investors to add energy storage units to projects that have already received connection offers.

Although the ministry’s thoughts on the issue are still nascent, it is already favorably inclined to pursue the plan, proposed by sector experts, as it would free up significant grid capacity and enable further RES development for a bigger green-energy share of the energy mix.

Highlighting the benefits offered by RES projects incorporating energy storage units, a RES project with a capacity of 100 MW, for example, would occupy 72 MW of the grid, whereas the same project would take up approximately 50 MW of the grid if it were to be equipped with an energy storage unit.

Efficient use of the country’s grid, saturated at certain points, is crucial. RES units in operation and maturing RES projects possessing final connection offers currently represent a total capacity of 24 to 25 GW, just below the transmission system’s projected capacity of approximately 29 GW in 2030.

Energy storage subsidies in tenders ensuring dispersion

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Standalone battery projects will face capacity limits of 100 MW in tenders offering investment and operational support for portfolios carrying such projects, the objective being to avoid exhausting capacities on offer with a small number of projects and ensure standalone battery projects are dispersed at various points around the grid.

According to energypress sources, limits will be set on the number of standalone battery projects that investors can submit to tenders as a means of ensuring competitive conditions for these units in wholesale markets.

In addition, companies and their subsidiaries participating in these tenders for energy storage investment and operational support will not be able to submit project plans exceeding 25 percent of total capacities being contested.

The terms for these tenders will ensure subsidy qualification for at least nine standalone battery investment projects. Also, projects eligible for this support program will need to belong to a minimum of four corporations.

As is the case with RES auctions, investors taking part in energy storage capacity auctions will need to register project plans representing a total capacity that is one-and-a-half times over the capacity being offered. If lower limits are not met, then capacities on offer will be revised downwards.

 

RES, energy storage auctions most likely after election

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A preparatory period of at least two-and-a-half months is still estimated to be needed for auctions offering tariffs to new RES projects and a first wave of standalone batteries concerning energy storage totaling between 900 and 1,000 MW, the latter to also receive investment support funds worth 200 million euros from the Recovery and Resilience Facility (RRF) if tightening deadlines are met.

Given the hefty time period still required for preparations, the auctions for both new RES projects and energy storage units will most likely not make it for before the country’s next national election, to take place in spring, some time between April and May.

As for the RES auctions, the next session will concern a second round catering to large-scale solar and wind energy units expected to represent more than 1 GW. In addition, a RES auction for small PVs with capacities of between 10 KW and 1 MW is still pending.

According to RRF terms, standalone battery projects to qualify for investment support will need to be completed by the end of 2025.

Grid-injection limit proposals for RES, storage units face opposition

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Renewable energy associations and producers, taking part in a consultation procedure staged by RAE, the Regulatory Authority for Energy, have rejected a proposal for universal grid-injection restrictions on RES facilities and energy storage units, instead calling for a plan offering greater flexibility.

ESIAPE, the Greek Association of Renewable Energy Source Electricity Producers, rejected a proposal for grid-injection restrictions, noting their imposition would come as an outdated and unsubstantiated move. The association has proposed more focused, demand-related restrictions, rather than universal ones, as the only viable solution that would minimize the loss of RES production.

The Mytilineos energy group also sees definite advantages in focused, demand-related restrictions as they could be applied in real time as well as on a localized basis.

SEF/HELAPCO, the Hellenic Association of Photovoltaic Companies, was one of many consultation participants who also spoke out against proposed universal, permanent grid-injection restrictions on energy storage units.

The association noted these restrictions would impact the financial feasibility of energy storage systems, adding that, by definition, these systems are meant to optimize grid infrastructure and the network and should not face restrictions.

 

Project of national importance status for interconnection in north

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The government has declared a new 400-kV electrical interconnection being developed by power grid operator IPTO from Filippoi to Nea Sanda in northern Greece as a project of national importance, a move promising unhindered development as the classification limits any potential obstacles that may arise in terms of licensing or environmental issues.

The electrical interconnection, to run a length of approximately 140 kilometers, was declared a project of national significance by the energy ministry as well as the development and investment ministry.

A number of factors were taken into account, including the objective of IPTO, owner and operator of the country’s grid, to ensure adequate, continuous, secure, efficient and reliable electricity supply to the country.

Balancing market interests as well as cross-border trade, based on principles of transparency, equality and free competition, were also taken into account.

So, too, was the potential offered by the project to increase storage capacity and distribution of electricity production, especially that of renewables, mainly large-scale wind farms, plus conventional power stations in the wider region.

Growing interest for RES units combining energy storage

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Investor interest for RES systems combining behind-the-meter energy storage units is constantly growing, as highlighted by the number of licenses issued for such projects by RAE, the Regulatory Authority for Energy, now numbering 36 for a total capacity of approximately 2.5 GW.

Of these projects, six, offering an overall capacity of roughly 1 GW, concern RES units with storage systems not able to absorb energy from the grid. The other 30 projects, offering 1.55 GW, are systems with energy storage units able to absorb energy from the grid.

The growing eagerness of investors to develop RES systems combining behind-the-meter energy storage units has been spurred by recently introduced government incentives in the form of priority status for connection terms offered by power grid operator IPTO. A related ministerial decision was signed in August.

The RAE licenses issued for RES systems with energy storage units mainly concern modest-sized projects with existing producer certificates and which have been modified for the addition of accumulators.

Energy storage investors scan details ahead of first auction

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Investors looking to install energy storage units in Greece are currently exploring  market participation details and options and how these could secure feasibility as they prepare for a first auction for standalone batteries, expected to take place within the next few months.

Participants will be offered 50 percent of a total capacity of 900 to 1,000 MW currently allotted to energy storage units. Looking further ahead, the country’s updated National Energy and Climate Plan envisages the installation of 5.6 GW in batteries for energy storage over the next ten years.

For the time being, it appears investors will need to develop their energy storage projects without state support, meaning their respective business models will rely entirely on funds generated through the market.

These revenues will, on the one hand, be generated by storage facility contributions to daily coverage of demand, and on the other, remuneration that could be received for provision of a range of services, including grid congestion relief and balancing.

Indeed, in cases of markets such as the UK and Ireland, serving as models for the domestic market, the provision of such services constitute the main source of income for energy storage units, which explains concerns raised by investors in Greece and why they are seeking clarification on financial details in advance before making investment decisions.

It should be noted, however, that in any case, the establishment of capacity mechanisms is considered necessary for the viability of energy storage projects.

Gas orders through collective EU platform to be discussed

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An energy ministry meeting scheduled for tomorrow will focus on a European platform introduced to facilitate collective natural gas orders next winter, the session’s objective being to determine gas quantities Greek market players would be prepared to order through this platform, promising collective-bargaining benefits expected to result through deals struck between the EU and international suppliers.

Tomorrow’s meeting, organized by the energy ministry, will involve the participation of the country’s four electricity producers, gas company DEPA Commercial, as well as industrial-sector officials.

A key objective of this new European platform will be to prevent competition between EU member states in international markets for natural gas orders, a consequence of the reduction in Russian gas supply to Europe that has escalated prices.

EU energy ministers approved the European platform for collective gas orders in mid-December.

EU member states equipped with gas storage facilities will be required to place gas orders – though the new collective platform – representing at least 15 percent of their respective gas demand when refilling storage facilities for next winter.

The European Commission has set an objective for EU gas storage facilities to be 90 percent full by next November.

At present, Greece does not possess gas storage facilities. Domestic market players may place orders through the new platform on a voluntary basis.

 

IPTO: At least 3 new gas-fired power stations will be required

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At least three new gas-fired power stations will be needed to ensure energy sufficiency within the next few years, but these new facilities will require a support mechanism to remain sustainable, a study conducted by power grid operator IPTO, looking ahead to the period between 2025 and 2035, has determined.

This IPTO study, whose findings have been unofficially handed over to the energy ministry, is essentially transitional as its outlook regarding the increase in RES and energy storage installations falls short of announcements made recently by energy minister Kostas Skrekas for the country’s updated National Energy and Climate Plan.

IPTO will make related revisions to the study once an upgraded NECP is officially approved.

Even so, two fundamental issues raised by the IPTO study appear unlikely to change. Firstly, the growing presence of wind and solar energy units in the energy system will need to be accompanied by the installation of more thermal plants, especially gas-fired power stations, given the existing capabilities of energy storage technology, in order to ensure electricity sufficiency.

Besides the new Ptolemaida V power station, now gearing up for a full-scale launch by the end of February – initially as a low-emitting lignite-fired power station before eventually converting to natural gas – at least three big gas-fired power stations will also be needed.

The IPTO study’s second fundamental finding unlikely to change concerns the need for support mechanisms to ensure the sustainability of both new and old power stations, given the concurrent installation of new RES units, energy storage facilities and gas-fired power stations. The energy ministry, as a result, will need to seek European Commission approval of Capacity Remuneration Mechanisms (CRM).

The IPTO study takes into account two RES penetration scenarios, one based on the existing NECP, established in 2019, forecasting RES installations of 15.5 GW and energy storage installations of 1.8 GW by 2030. The other scenario, more ambitious, assumes RES installations of 24 GW and energy storage installations of 3 GW by 2030.

First energy storage auction to be announced end of 1Q in ’23

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Energy ministry officials have reached an advanced stage for a formula concerning standalone battery system auction rules, but are expected to require a further two months or so to finalize all the details.

Given the work still needed, officials are expected to announce a first standalone energy storage auction at the end of the first quarter in 2023.

The capacity to be allocated for each of two auctions is one of the details that still need to be determined at the energy ministry.

Officials initially intended to evenly split an overall capacity of 900 to 1,000 MW between the two sessions, but are now considering allocating a greater share of the total to the first of the two auctions.

In addition, ministry officials have yet to decide on the licensing maturity level investors behind storage units will need to have reached in order to be able to participate in these auctions.

Investors may be required to have obtained finalized connection terms to be considered eligible for the energy storage auctions, a prerequisite that applies for renewable energy facilities and their respective auctions.

Whatever the outcome, authorities are looking to create conditions that will ensure high levels of auction participation and competition amongst bidders.

The government plans to allocate a Recovery Fund sum of 200 million euros as support for energy storage projects.

As regards energy storage projects for which permits have already been issued, 62, or 22 percent of the total, are planned to have capacities in excess of 100 MW. Of these, 16 possess capacities of more than 200 MW, the largest of these reaching 300 MW.